40% of STBs should be procured from domestic manufacturers: Uday Varma

The shortage of Set Top Boxes (STBs) has plagued the digitisation process, slowing down its implementation in quite a few cities. Now, with the final phase of digitisation currently underway, there is better understanding on the requirement of STBs in different cities. However, the problem of STB shortage still persists.

According to Uday Varma, former Secretary, Ministry of Information and Broadcasting (MIB), this shortage provides a golden opportunity for local manufacturers to penetrate the market.

In an exclusive conversation with exchange4media, Varma stressed, “My opinion has always been that we must do everything we can to encourage the use of domestic set top boxes. There should be a certain minimum percentage of STBs that must be procured from domestic manufacturers. We need to initiate this process particularly in the subsequent phase of digitisation.”

He further said that domestic manufacturers must also ensure that they keep the prices competitive to the imported STBs. “I think that the MIB and the Ministry of Information and Technology need to get together and work out a mechanism, whereby in the subsequent phase domestic manufacturers are able to offer at least 40 per cent of the total requirement of STBs, if not more. That will be a win-win situation for everyone concerned,” he added.

When asked whether there are enough local manufacturers of STBs in India, Varma replied, “I think there are some very big STB manufacturers in India, who have the capacity to meet the challenge. The issue is how to get their acts together and how do they really use the existing set of regulations on the tax structure to their advantage. If you will recall, in the last Union Budget, imported STBs were mandated to pay an additional 5 per cent customs duty. This decision was taken to ensure that domestic manufacturers get a level playing field.”

He further noted that with the depreciation of the Rupee, importing STBs has become costlier. “It is the best time for domestic manufacturers to penetrate the market, which is only going to grow. With the maintenance that will be required and with the newer technology coming in, this market will sustain for at least another decade or so,” Varma maintained.

It may be noted here that in an earlier conversation with exchange4media, Manish Tewari, Minister for Information and Broadcasting had said, “One of the biggest ironies of the entire process is that we have allowed China, Taiwan and South Korea to put $5 billion in the pipeline because all these STBs are imported.”

As per industry estimates, around 75 million STBs will be required to complete the third phase of cable TV digitisation in the country, which is slated to conclude in December 2014.